Hawks Want Iraqi Oil — for Iraqis!

Hawks Want Iraqi Oil — for Iraqis!

The US’s right wing wants Iraq oil shared now

Iraq has a lot of oil, but the Iraqi people have very little money. Almost all the revenue from oil goes to corruption. But it doesn’t have to be that way, not if some right wing voices – echoed by left wing pundits – are heard. If it’s good enough for Alaska, it should suit Iraq as well.

by Jeffery J. SmithApril, 2007

Presidential candidate Tommy Thompson told ABC’s “This Week” that Iraqs oil revenues should be shared as does Alaska, with a split “to every man, woman and child.” This liberal recommendation comes from a Republican who describes himself as the reliable conservative. (CNN, 2007 April first) No joking; Thompson is but the latest right-winger to call for sharing oil revenue.

George Schultz, ex of Ronald Reagans cabinet who came from Bechtel (which, among other activities, rebuilds foreign nations after US wars tear them apart), on the TV show Charlie Rose a couple years back just before Christmas (2005 Dec 22) said: Some portion of the oil revenues [should] be put into a trust and then distributed to the people of Iraq.

From the Heritage Foundation in Washington DC, their commentator, Ariel Cohen, wrote: As in the Alaska model, part of the [oil] revenue should be distributed directly to the bank accounts of every Iraqi. (2004 March 4, Backgrounder #1730)

Paul Bremer, while the US administrator of Iraq, wrote in The New York Times (2003 July 13): We believe that a method should be found to assure that every citizen benefits from Iraq’s oil wealth. One possibility would be to pay social benefits from a trust financed by oil revenues. Another could be to pay an annual cash dividend directly to each citizen from that trust.

A former Exxon executive, Bruce M. Everett, when safely at Tufts University, wrote in The Christian Science Monitor (2003 September16): Iraq should distribute its oil revenues directly to its 25 million citizens, with each individual receiving $600 to $700 per year or $3,000 to $3,500 for a family of five. Beyond supporting basic human needs, much of this cash would be invested in small businesses, services, agriculture, and the other ingredients of a vibrant economy  without political strings.

The press, both conservative and, well, hardly liberal by European standards, echoed the call, including The Financial Times (London) and The Wall Street Journals Deputy Editor George Melloan (2003 April 15 and 22). The New America Foundation in Washington DC pushed the Iraqi oil dividend on The Charlie Rose Show on PBS (2003 April) and in The New York Times (2003 April 9). The Washington Post (2003 April 13) and The Los Angeles Times ran op-eds, the latter by Barbara Ehrenreich (2003 May 2).

Lesser known publications beat the same drum: New Yorks Newsday, The Washington Times (2003 Feb 21), UPI (2003 May 14), The San Diego Union-Tribune, The Daily Oklahoman, The Tulsa World, The Edmonton Journal, The Record of Kitchener-Waterloo (Ontario), and Pensions and Investments (magazine).

Foreign Affairs published an article, Saving Iraq From Its Oil (2004 July 20, Volume 83 No. 4) stating, There is only one way for Iraq to resist the oil curse: by handing over the proceeds directly to the Iraqi people.

Pennsylvanias Democratic governor, Ed Rendell, said we should have made some payment from Iraq’s oil revenues to each citizen; as little as $20 each would tell Iraqis that we viewed it as their oil, not ours (MSNBC with Chris Mathews). Reason on line (2005) and The Weekly Standard (2005 September 6) made similar arguments.

Besides for Iraq, an oil dividend is promoted for other places, too. The IMF did so for Nigeria (IMF Working Paper No. 03/139). Newsweek International mentioned the oil dividend as one way to reform Russias oil industry (2005 Sept. 12). Eluniversal.com (2005 August 9) and Petroleum.com published Michael Rowans The Sinkhole, which urged an oil dividend for Venezuelans.

Besides the ongoing dividend, theres a one-time dividend. In oil-rich New Mexico, Governor Bill Richardson (his press release of 2003 October 22) and prominent members of the state legislature advocated a $50 tax rebate per person. In early 2006, Alberta shared its oil revenue surplus with residents, sending out one-time checks of $C 400 (Globe & Mail, 2005 November 10).

The New York Times (2003 September 10) opined: Divide the money equally. Give each Iraqi his share on the first day of every month. That is essentially the same idea in vogue among liberal foreign aid experts, conservative economists and a diverse group of political leaders in America and Iraq.

No wonder the wide consensus. Its an easy call to make. Oil is extremely valuable and absolutely labor-free; that pricey gooey stuff lying underground got there without the help of anyone  and even untouched its worth a fortune.

So how long must the Iraqis  and the rest of the world  wait? Perhaps until a US president actually mandates it. Then after the Iraqis, may the rest of the world be next.

Our editor published The Geonomist which won a Californian GreenLight Award, has appeared in both the popular press (e.g., TruthOut) and academic journals (e.g., USC’s Planning and Markets), been interviewed on radio and TV, lobbied officials, testified before the Russian Duma, conducted research (e.g., for Portland’s mass transit agency), and recruited activists and academics to the Forum on Geonomics. A member of the International Society for Ecological Economics and of Mensa, he lives in America’s Pacific Northwest.

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Arts & Letters

Geonomics is …

a neologism for sharing “rent” or “social surplus” – the money we spend on the nature we use. When we buy land, such as the land beneath a home, we typically pay the wrong person – the homeowner. Instead, since land cost us nothing to make and is the common heri-tage of us all, rather than pay the owner, we should pay ourselves, our neighbors, our community. That is, we should all pay land dues to the public treasury, then our government would pay us land dividends from this collected revenue. It’s similar to the Alaska oil dividend, almost $2,000 last year. Indeed, the annual rental value of land, oil, all other natural resources, including the broadcast spectrum and other government-granted permits such as corporate charters, totals several trillion dollars each year. It’s so much that some could be spent on basic social services, the rest parceled out as a divi-dend, as Tom Paine suggested, and taxes (except any on natural rents) could be abolished, as Thomas Jeffer-son suggested. Were we sharing Earth by sharing her worth, territorial disputes would be fewer, less intense, and more resolvable.

the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki’s bestseller, Rich Dad’s Prophecy, says, “One of the reasons McDonald’s is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.

not exactly Georgism, the Single Tax on land value proposed by Henry George. He did, tho’, inspire most of the real-world implementations of the land tax that some jurisdictions enjoy today, and modern thinkers to craft geonomics. While his name and our remedy both begin with “geo” since both words refer to “Earth”, the two have their differences. (a) George pegs land monopoly as the fundamental flaw while geonomics faults Rent retention. (b) To fix the flaw, George was content to use a tax, while geonomics jettisons them in favor of price-like fees. (c) George focused on the taking while geonomics headlines the sharing. George envisioned an enlightened state judiciously spending the collected Rent while geonomics would turn the lion’s share over to the citizens via a dividend. (d) And George, as was everyone in his era, was pro-growth while geonomics sees economies as alive, growing, maturing, and stabilizing. Despite these differences, George should be recognized as great an economist as Euclid was a geometrician.

as unfamiliar as geo-economics. The latter is a course some universities offer that combines geography and economics. A UN newsletter, Go Between (57, Apr/May ’96; thanks, Pat Aller), cited an Asian conference on geopolitics and “geoeconomics”. The abbreviated term ‘geonomics” is the name of an institute on Middlebury College campus and of a show on CNBC. Both entities use the neologism to mean “global economics”, in particular world trade. We use geonomics entirely differently, to refer to the money people spend on the nature they use, how letting this flow collect in a few pockets creates class and poverty and assaults upon the environment, and how, on the other hand, sharing this rental flow creates equality, prosperity, and a people/planet harmony. This flow of natural rent, several trillions dollars in the US each year, shapes society and belongs to society.

a new policy from a new perspective. Once your worldview shifts — so that vacant city lots are no longer invisible — then epiphany. “Of course! Why didn’t I see it before?” Once you do see the emptiness and what damage it does, how can you ever go back to the old paradigm?

of interest to Dave Lakhani, President Bold Approach (Mar 8) and Matt Ozga (Jan 29): “I write for the Washington Square News, the student run newspaper out of New York University. Geonomics seems like it has great significance, especially in this area. When was geonomics developed, and by whom?”
About 1982 I began. Two years later, Chilean Dr Manfred Max-Neef offered the term geonomics for Earth-friendly economics. In the mid-80s, a millionaire founded a Geonomics Institute on Middlebury College campus in Vermont re global trade. In the 1990s, CNBC cablecast a show, Geonomics, on world trade as it benefits world traders. My version of geonomics draws heavily from the American Henry George who wrote Progress & Poverty (1879) and won the mayoralty of New York but was denied his victory by Tammany Hall (1886). He in turn got lots from Brits David Ricardo, Adam Smith, and the French physiocrats of the 1700s. My version differs by focusing not on taxation but on the flow of rents for sites, resources, sinks, and government-granted privileges. Forgoing these trillions, we instead tax and subsidize, making waste cheap and sustainability expensive. To quit distorting price, replace taxes with “land dues” and replace subsidies with a Citizens Dividend.
Matt: “This idea of sharing rents sounds, if not explicitly socialist, at least at odds with some capitalist values (only the strong survive & prosper, etc). Is it fair to say that geonomics has some basis in socialist theory?”
A closer descriptor would be Christian. Beyond ethics into praxis, Alaska shares oil rent with residents, and they’re more libertarian than socialist. While individuals provide labor and capital, no one provides land while society generates its value. Rent is not private property but public property. Sharing Rent is predistribution, sharing it before an elite or state has a chance to get and misspend it, like a public REIT (Real Estate Investment Trust) paying dividends to its stakeholders – a perfectly capitalist model. What we should leave untaxed are our sales, salaries, and structures, things we do produce.

suitable for framing by Green Parties. When Greens began in Germany two decades ago, they defined themselves as neither left nor right but in front. Geonomics fits that description. The Green Parties have their Four Pillars; geonomists have four ways to apply them:

Ecological Wisdom. Want people to use the eco-system wisely? Charge them Rent and, to end corporate license, add surcharges. To minimize these costs, people will use less Earth.

Nonviolence. Want people to settle disputes nonviolently? Set a good example; don’t levy taxes, which rely on the threat of incarceration, to take people’s money. Try quid pro quo fees and dues.

Social Responsibility. Want people to be responsible for their actions? Don’t make basic choices for them by subsidizing services, addicting them to a caretaker state. Let people spend shares of social surplus.

Grassroots Democracy. Better have grassroots prosperity. Remember, political power follows economic. Pay people a Citizens Dividend; to keep it, they’ll show up at the polls, public hearings, and conventions.

one of many words I coined over 20 years ago: geoism, geonomics, geonomy, geocracy, etc – neologisms that later others came up with, too. CNBC once had a Geonomics Show, and Middlebury College has a Geonomics Institute. If “economy” is literally “management of the household”, then geonomy is “management of the planet”. The kind of management I had in mind is not what CNBC was thinking – top-down. My geonomics is not hands-on, interfering, but hands-off, organic. It’d strive to align policy with natural processes, similar to what holistic healing does in medicine, what organic farming does in agriculture. Geonomics attends to two key components: One, the crucial stuff to track is fat – or profit, especially profits without production, such as rent, or all the money we spend on the nature we use. Society’s surplus is the sine qua non for growth, needed to counter death – not merely more, but sustainable development, more from less. Two, the basic process to respect is the feedback loop. These let nature maintain balance automatically and could do the same for markets, if we let them. Letting them would turn our economies, now our masters, into a geonomy, our servant, providing us with prosperity, eco-librium (to coin a term) and leisure, time off – a hostile environment for economan but a cradle for a loving and creative humanity.

a manual. The world did not come without a way for people to prosper, and the planet to heal and stay well; that way is geonomics. Economies are part of the ecosystem. Both generate surpluses and follow self-regulating feedback loops. A cycle like the Law of Supply and Demand is one of the economy’s on/off loops. Our spending for land and resources – things that nobody made and everybody needs – constitutes our society’s surplus. Those profits without production (remember, nobody produced Earth) can become our commonwealth. To share it, we could pay land dues in to the public treasury (wouldn’t oil companies love that?) and get rent dividends back, a la Alaska’s oil dividend. Doing so let’s us axe taxes and jettison subsidies. Taxes and subsidies distort price (the DNA of exchange), violate quid pro quo by benefiting the well-connected more than anyone else, reinforce hierarchy of state over citizen, and are costly to administer (you don’t really need so much bureaucracy, do you?). Conversely, land dues motivate people to not waste sites, resources, and the ecosystem while rent dividends motivate people to not waste themselves. Receiving this income supplement – a Citizens Dividend – people can invest in their favorite technology or outgrow being “economan” and shrink their overbearing workweek in order to enjoy more time with family, friends, community, and nature. Then in all that free time, maybe we could figure out just what we are here for.

a scientific look at how we divvy up the work and the wealth, how some of us end up with too much or too little effort or reward. That’s partly due to Ricardo’s Law of Rent, showing how wasteful use of Earth cuts wages. And it’s partly due to how a society’s elite runs government around like water boys, dishing out subsidies and tax breaks. While geonomists look political reality right in the eye, without blinking, conventional economists flinch. When Paul Volcker, ex-chief of the Federal Reserve, moved on to a cushy professorship at Princeton cum book contract, the crush of deadlines bore down. So Volcker asked a junior associate to help with the book. The guy refused, explaining that giving serious consideration to policy would ruin his academic career. The ex-Fed chief couldn’t believe it and asked the department chair if truly that were the case. That head honcho pondered the question then replied no, not if he only does it once. And economics was AKA political economy!